Procedure of transferring of land use rights

Land is a special type of asset and having a complex legal nature on its own. According to the prevailing laws of Vietnam, land is owned by the people. The Government is authorised representative of the people (the land’s owner) and will conduct management of the land on behalf of the owner. Accordingly, the Government will grant land use rights to land users in accordance with the provisions of the Law on Land. In case the land users want to “sell” their land use rights to the purchaser, they need to carry out the procedure for transfer of land use rights pursuant to the provisions of the Law on Land. Therefore, transfer of land use rights itself is simply not just the execution of a  assets sale and purchase contract . This article will clarify the procedure of transferring land use rights in Vietnam according to the prevailing laws.

1. What is transferring of land use rights?

According to the provisions of the prevailing Law on Land, transferring of land use rights is defined as follows: “Land use right transfer is the transfer of land use rights from one person to another through the form of conversion, transfer, inherit, donation of land use rights, and contribution of capital with land use rights.”

The contract for transferring of land use rights must be made in writing and approved by competent state authorities. The procedures for transferring of land use rights shall be carried out by relevant parties and be registered at the competent People’s Committee as prescribed by law. The transferee will have the right to exploit the land and shall be entitled to enjoy its benefits; at the same time, they must pay the transferor a certain amount of money according to the executed contract for transferring of land use rights.

The procedures for transferring of land use rights shall help minimising unnecessary administrative procedures such as approval, recovery, allocation of land, etc., while still ensuring the legitimate rights for the transferee.

2. Conditions for transferring of land use rights

A land user may transfer his land use right when the following requirements are satisfied:[1]

• There is a Certificate of land use rights for the land, except for the case specified in Clause 3, Article 186 and the case of inheritance specified in Clause 1, Article 168 of the Law on Land;
• There is no dispute over such land;
• Land use rights are not distrained to secure any judgment enforcement; and
• Land use term is not over.

Thus, in case the land users have satisfied all regulated conditions for transferring of land use rights but not being issued a Certificate of land use rights, they cannot conduct procedures for transferring of land use rights until they have such Certificate in their hand first.

The transferring of land use rights must be registered at the land registration office and takes effect once it is recognised in the cadastral book.

In addition to the abovementioned regulated conditions, when carrying out the procedure of transferring of land use rights for some special types of land, the land users must also satisfy other conditions for these particular types of land.

3. Procedure of transferring of land use rights

Step 1: Executing a contract for transferring of land use rights at the public notary offices and have such contract notarised. Documents to be prepared, including: documents certifying legal status for organisations and individuals, certificates of land use rights, in case the transferee is an individual and got married, a certificate for marriage registration is required. If they are not, a certificate of marital status is required.

Step 2: Declaring financial obligations at the Land Registration Office.

Application dossier for amendment of Certificate of land use rights in the case of land use right transfer shall comprise of the followings:

• Registration fee declaration (02 copies signed by the transferee);
• Personal income tax declaration (02 copies signed by the transferor);
• Notarised contract for transferring of land use rights (01 original);
• Certificate of land use rights (red book), ownership of houses and other assets attached to the land (01 certified copy issued by competent authorities);
• Identity card/Citizen ID + Household registration book of both the transferor and the transferee for individuals, documents certifying legal status for organizations (01 certified copy issued by competent authorities);
• In case of donation or inheritance, there must be documents proving the personal relationship of the donator and the recipient in order to be exempted from personal income tax; and
• Timeline for tax payment: 10 days after the notice on tax payment is issued, taxpayers shall send applicable tax amount into the state budget.

Step 3: Preparing application dossier for change of land use rights’ owner.

Application dossier shall comprise of the followings:

• Application for amendment (signed by the transferor); In case it is stated in the contract that the transferee shall carry out the administrative procedures, the transferee may sign on transferor behalf.
• Contract for transferring of land use rights; contract for donation of land use rights; or agreement on allocation of assets; inheritance declaration documents;
• Certificate of land use rights (red book), ownership of houses and other assets attached to the land (original);
• Receipt for tax payment (original);
• A copy of Identity card/Citizen ID + Household registration book of both the transferor and the transferee for individuals, documents certifying legal status for organizations .

Step 4: Paying the administrative fee and obtaining the amended certificate of land use rights.

Above is an overview of the procedure of transferring of land use rights that Phuoc & Partners shares with readers. If you have any difficulties related to the legal field, please contact us. Phuoc & Partners is a professional consulting firm established in Vietnam and currently has nearly 100 members working in three offices in Ho Chi Minh City, Hanoi and Danang. Phuoc & Partners is also rated as one of the leading consulting firms specializing in business law in Vietnam that has leading practice areas in the legal market such as Labour and Employment, Taxation, Merger and acquisition, Litigation. We are confident in providing customers with optimal and effective service.

[1] Article 188 of Land Law 2013